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Until this moment I have been forced to listen while media and politicians alike have told me "what Canadians think". In all that time they never once asked.
This is just the voice of an ordinary Canadian yelling back at the radio -
"You don't speak for me."
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My bet would be a long Japanese-style economic malaise due to its half-in, half-out version of capitalism.
The key to all of this is the US Dollar.
Right now the old adage “you can’t beat the fed” has held true. The fed wants to heel to its master and issue more debt at low rates and the flight to safety – read the US – is as strong as it has ever been and thus foreigners have been buying it up keeping the dollar high and rates near zero.
By foreigners one really is referring to China as it has easily been the largest buyer of US paper.
There are two things that can cause the fed to get beaten and they both revolve around china:
1. the Chinese economy really does go in the toilet and they start selling – or at least stop buying – US debt because they either don’t have the money or they have to bail out their own businesses in China. That sort of happened this summer and the fed very briefly may have lost control, but the chinese blocked and trades of the 60 (?) top chinese companies for six months which for the time being prevented a chinese stock market breakdown. The six months comes up in the next month or so.
2. The Chinese continue to deregulate and allow more personal freedoms. Their leaders have met with those from taiwan a couple of weeks ago (they didn’t inform any one – nor did taiwan (they left obama out of the loop). And there have been rumors of a feared overthrow in china of the hardliners. If china was to really become a more free society it is axiomatic that they will become a more peaceful and thus less of a threat to its neighbours and the world as a whole. And a peaceful, cooperative china means that the fed will lose a big part of the risk premium it currently charges meaning a global run on the US dollar.
For nor the “can’t beat the fed” meme holds. But when it doesn’t – when they do get beat – that means Stagflation.
This does not compute. Justin told us that he most admires the Chinese because they can turn their economy around on a dime.
This is a bit of a bull-shit piece. For example, the article states electricity use, which is a good estimate of economic growth, only increased 0.8% during the first 3 quarters of 2015 from a year earlier. First of all 0.8% does not suggest a 1930s style depression, but more importantly neither the article nor the link it provides mentions anything about what the previous growth of electricity use was. If it was a 20% increase year over year and then dropping to 0.8% well OK there’s a problem. But what if it was previously 1.0% now falling to 0.8%?
The second problem is the following two paragraphs.
“Another disturbing sign is found in price data. In Q3, nominal GDP growth of 6.2% was less than the officially reported real growth of 6.9%, indicating deflation.
Deflation is never a good sign, and China looks as if it is now caught in the trap of falling prices. That means a 1930-style adjustment — a crash, in common parlance — is increasingly possible. And maybe even likely.”
So GDP growth was reported as 6.9% but it’s actually 6.2% and that is labelled 1930-style deflation? That reads worse than climate science alarmism where a 0.07 degree per year increase in Global temperatures is leading to the boiling of our oceans and where our kiddies won’t even know what snow is.
It’s pretty obvious that China has slowed down, probably more than most economists expected. But as a friend of mine once said about economists, “if economists are so smart, why do they wear cheap suits?”
I have been around for a long time now. It has been an observation of mine that business cycles are just that, business cycles. When people are young and are having families the demand for housing and all other goods expands. We have reached a point where the world is saturated with consumer goods and until those goods are sold and wear out the demand will be slow. Trying to keep any economy constantly growing is a fools game. We are also seeing a situation where there are hundreds of millions of people producing nothing and sucking the life out of all producing countries. Rather than let these leeches die we continue to import them into western countries and feed, clothe and house them. What is being expended is false economy. The world will still be here long after we have screwed up our own societies.
I wonder if the author is hyping his book?
Gordon G. Chang is the author of The Coming Collapse of China.
Corruption is expensive.
Boy I hope so. The Chicoms shit up my Dad real bad in 1951. Hate those MFers.
…….”shot”
steve, yah that only 6.2 instead of 6.9 caught my eye as well. But there is another marker I watch as to the chicom economy, and that is scrap prices, they are in the toilet. Therefore I no long haul scrap:-)))